Amazon Q4 2012 Earnings: Sales of $21B, Profits Drops

The world's largest online retailer Amazon has announced its fourth quarter earnings for 2012, with the firm's sales increasing but it also saw a considerable decrease in profits.

Amazon's net profit dropped by 45 percent to $97 million, or 21 cents per share. Comparatively, it generated $177 million, or 38 cents a share, for the fourth quarter of 2011.

In the last quarter of 2012 ending on December 31, Amazon enjoyed sales growth of 22 percent to $21.27 billion. However, the figure fell short of the average earnings estimate of 29 cents-per-share. Operating margins, meanwhile, increased from 1.3 percent to 1.9 percent.

Amazon expects revenue between $15 billion and $16.6 billion during the first quarter of 2013, which would represent a 14 percent or 26 percent increase when compared to revenue generated in the first quarter of 2012. It also forecasts a loss of $285 million loss and profit of $65 million. During the Q1 of 2012, it generated $192 million in operating profit.

"We're now seeing the transition we've been expecting," said CEO Jeff Bezos. "After 5 years, eBooks is a multi-billion dollar category for us and growing fast -- up approximately 70% last year. In contrast, our physical book sales experienced the lowest December growth rate in our 17 years as a book seller, up just 5%. We're excited and very grateful to our customers for their response to Kindle and our ever expanding ecosystem and selection."